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remindmodel / remind

REMIND - REgional Model of INvestments and Development
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Bugfix: exogenous secondary energy trade prices #1697

Closed Renato-Rodrigues closed 2 weeks ago

Renato-Rodrigues commented 3 weeks ago

Purpose of this PR

Model marginal prices are not necessarily competitive when we enforce exogenously traded quantities.
This could cause the secondary energy trade flows to "eat" a bigger amount of the country trade budget than they should, which could cause infeasibilities in the equations `q23_limit_debt_growth` and `qm_budget`.
Additional secondary energy traded prices upper bounds were added to avoid this issue.

Important

The current allowed range of secondary energy trade prices is quite strict in the code:

These value corridors should be revised by people that are more expert on the topic if necessary to reflect reasonable cost terms in the REMIND reporting variables.

Type of change

Checklist:

Further information (optional):

robertpietzcker commented 3 weeks ago

Is there a reason the limits range is so small? I would rather go for 1-10$/kg for H2, and 5-50$/GJ for synfuel and bioliquids.

robertpietzcker commented 3 weeks ago

maybe add a lower bound of 0 as well?

Renato-Rodrigues commented 3 weeks ago

Is there a reason the limits range is so small? I would rather go for 1-10$/kg for H2, and 5-50$/GJ for synfuel and bioliquids.

I set the hydrogen range to be more or less compatible with IEA net-zero assumption: https://www.iea.org/reports/global-hydrogen-review-2021/executive-summary#:~:text=The%20potential%20is%20reflected%20in,from%20natural%20gas%20with%20CCUS.

This hydrogen exporting cost range should reflect the value on an EU net-zero and high mitigation World case; with high renewables penetration; with relevant trade levels being present mainly after 2040; and they should reflect only the cost range of countries with very favorable hydrogen production conditions which could turn them into exporting countries.

In practice, the model will tend always to stay in the upper bound (2$/kg in this case), which I found a reasonable assumption under the above conditions. I would consider anything around 5$/kg to be extremely pessimistic. Maybe 3$/kg would be acceptable, but as we have limited trade anyway (lower than the RePowerEU ambitions), I decided against being closer to the IEA upper bound values.
Values bigger than 5$/kg would most probably cause the issues that I mentioned of too much of the total trade budget being directed to this exogenously defined secondary energy trade flows, hindering the macro balance.

For synfuel and bioliquids, I simply scaled the upper bound to have the same size (2 times more than the lower bound), as I used for hydrogen as a simplified assumption and because the lack of more time to better micro-found the decision.

maybe add a lower bound of 0 as well?

There was already a lower bound set for prices (see the numbers below). This was already present in the code and previously used to avoid cases that lack equation-marginal-information for setting the secondary energy marginal prices:

Renato-Rodrigues commented 3 weeks ago

The upper bound for the exporting prices were increase for years before 2050 following the reviewer comments.